A discussion on Operational Programme “Transport” progress


Engl-1.jpgThe implementation progress of Operational Programme “Transport” (OPT) was discussed twice within one week in December in Sofia. On 9th and 10th December the Deputy Minister of transport, Ivaylo Moskovski, headed the ninth session of OPT Supervision Committee.

It was decided to transfer EUR 60 million from Priority axis 2 (development of road infrastructure) to Priority axis 1, which makes it possible to utilize these funds for the completion of Sofia Underground (from Obelya to Nadezhda and from Mladost 1 to Tsarigradsko shoes) and the procurement of new rolling stock.

It was proposed that SE “Port infrastructure” should be rendered beneficiary under Priority axis 3 “Improvement of intermodality in passenger and freight services”. The so called Super Burgas project is to be funded under this axis. SE NRIC reported a 36% completion of the railway project “Svilengrad – Turkish/Greek border”. It was announced that the request of Holding BDZ EAD to be included as a beneficiary under OPT will be discussed.

On 17th December a forum was held in Grand Hotel Sofia, where the progress in OPT implementation was presented. The forum was opened by Deputy Minister Moskovski, who stated that by end-2010 nearly EUR 600 million have been contracted which amounts to almost 30% of the overall budget. Only during the current year a total of EUR 365 million have been contracted which amounts to 60% of all contracted funding since 2007. MTITC has validated the application form for Parvomai – Svilengrad railway line project and has submitted it to the EC for approval (grant funding for this project is EUR 180 million).

During the forum the beneficiaries presented the progress achieved within the particular projects. Thus, it became clear from the presentation of the Deputy Director General of SE NRIC, Krasimir Krachunov, that the implementation of the project for the construction of a new railway line between Vidin and Sofia (the tentative cost of which is EUR 2.68 billion) will start during the next programme period of OPT, i.e. after 2015.



The Government validated the Memorandum with the WB


Engl-2.jpgOn 15th December the Council of Ministers validated a Memorandum for understanding with the World Bank (WB), which supports the reform in the railway sector. The document comes as continuation of the Memorandum for understanding to boost the cooperation in the sphere of infrastructure development in our country, which was signed in the summer of 2010 by PM Boyko Borisov and World Bank President Robert Zoellick. The funding, which Holding BDZ EAD can receive as a loan from the WB, amounts up to BGN 460 million, and the loan for SE NRIC can amount up to BGN 140 million. The Government undertakes the commitment to establish a financially stable railway sector which is compliant with European requirements and keeps a strict fiscal discipline, underlined the transport minister Alexander Tsvetkov. It is expected that the loan, which will be state guaranteed, will be finally agreed by May 2011.

According to experts, quoted by the media, this will be a 20-year loan with 4% interest rate and a 7-year grace period. Holding BDZ EAD will utilize most of the funding to cover its debts (currently they amount to BGN 572 million to the banks – mostly to the German KfW and the Bulgarian Development Bank - as well as BGN 171 million of overdue liabilities to contractors – mostly, SE NRIC).

In its turn SE NRIC will utilize the funding from the loan to procure new equipment for construction, maintenance and reconstruction of railway lines, construction of automated level crossings, etc. which will make it possible to optimize the personnel that is currently involved in these activities. In this connection Minister Tsvetkov pointed out that personnel optimization will be implemented through retirement of employees, holding down two jobs concurrently without appointing outsiders in the course of natural personnel turnover, outsourcing of some non-core activities, etc. According to him, the investment loan will help improve train speed and security and the objective is to render Bulgarian railways profit-making by 2013. It is common knowledge that by then the one hundred measures for reforms in the railways will be implemented and according to the minister they should produce a financial effect of nearly BGN 83 million.



A Bulgarian – Italian consortium won the bidding for Plovdiv – Burgas line


Engl-3.jpgThe bids for the rehabilitation of Plovdiv – Burgas railway line were opened on 21st December 2010 in the Head Office of SE NRIC. The lowest bids for the three separate lots of the project (Mihailovo – Kaloyahovets line section, including the main tracks at both stations, with an overall length of 21 km; Stara Zagora – Yambol and Zavoi - Zimnitsa railway line sections, including the main tracks at all stations along Stara Zagora – Yambol line section, with an overall length of 120 km; Tserkovski – Karnobat and Karnobat – Burgas line sections, including the main tracks at Tserkovski station, with an overall length of 28 km and all stations between Karnobat and Burgas with an overall length of 122 km) were offered by the consortium between the Bulgarian companies TRACE RAILINFRA (daughter-company of TRACE GROUP HOLD AD) and SK 13 and the Italian company GENERALE COSTRUZIONI FERROVIARIE (G.C.F. S.p.A.). The consortium offered for Lot 1 the price of BGN 35 582 812.3 (VAT included), for Lot 2 – BGN 230 287 614 and for Lot 3 - BGN 211 094 561.85. The technical rating of the bid for the three lots was 27 points.

The main competitor of the consortium for Lot 1 was the consortium between the Italian company BTP and the Bulgarian company GLAVBOLGARSTROI, which offered a higher price (BGN 40.685 million) but received the maximum technical rate of 30 points. For Lots 2 and 3 the main competitor was the consortium between the Italian company SALCEF and the Bulgarian company Energoremont. It is common knowledge that 70 % of the weight during evaluation is given to the lowest offered price and the remaining 30% are allocated to the technical rating of the design.

This is the third large infrastructure project which is to be implemented with the participation of TRACE GROUP – the other two projects are a section of Trakiya highway (for about BGN 138 million) and two section of Sofia Underground (for a total of BGN 360 million).

Immediately after the selection of the winning bidder, the transport minister Alexander Tsvetkov stated that a saving of BGN 110 million has been made for the rehabilitation of Plovdiv – Burgas railway line. Such is the difference between the lowest financial bid from the first bidding and the bid of GCF – SK 13 – TRACE (i.e. BGN  316 068 850. 42 compared to BGN 426 229 111 before VAT, which were offered at the first bidding since the beginning of 2010 that was cancelled in June last year as the offered price surmounted by about 30% the tentative price of the project – BGN 366.45 million).

After the implementation of this project, the trains along Plovdiv – Burgas line will operate at speeds of 130 – 160 km/h (while the current average speed is 80 km/h) and journey times will be reduced by 1 hour and 10 minutes.



SPENO: the capacity for state-of-art rail maintenance



Engl-4.jpgAt the end of the last year at a seminar in Sofia, the Head of Sales Department at SPENO International – dipl. eng. Rudolf Koller, presented the capacities of the company for rail diagnostics and overall maintenance.

SPENO International operates in countries from all continents and its activities encompass the whole scope of research, development, production and operation of machines for grinding and re-profiling of rails and switches, profile measurement and identification of faults on the rail surface as well as checking for internal faults in the railhead by means of ultrasound scanning and eddy current inspection.  

SPENO continues to develop its know-how not only in the sphere of rail maintenance but as regards the machine development as well. Grinding machines and stones are being developed in close cooperation with the subcontractors Mecnafer (in Mestre, for grinding trains) and ASI (in Marcon, for the production of grinding stones) in Italy.

In the sphere of rail maintenance SPENO has deployed its activities over the five continents and renders rails reliable for all kinds of operational conditions. This includes underground railways as part of public transport as well as heavy-haul trains and high-speed trains.

SPENO is seated in Geneva, where it was founded in 1960, and today has over 600 employees all over the world. Customers of the company services amount to 196 from 47 countries. Currently the company capacity exceeds 40 000 km of finished grinding work per year.

In the course of its development, SPENO has introduced a great number of innovations in its sphere of activity. In 1980 the company produced the first road-rail (high-rail) grinding machine for urban networks. Three years later it introduced the first grinding machine for switches. In 1985 the company launched the first rail flaw detection vehicle providing real-time results. In 1987 SPENO introduced the first grinding machine with dust aspiration.

Today, SPENO remains committed to its activities in the services field, although the sales of its machines have been expanding considerably. The company team continues to aspire to introduce further improvements and innovations and is ready to offer flexible solutions to the railways around the world.


Eng. Rudolf KOLLER, Head of Sales Department in SPENO, in an exclusive comment for “Railway transport” magazine:


Engl-5.jpgOur strategy in Europe is not to sell machines but to offer services for rail flaw detection and rail maintenance by means of temporary assignment of machines and qualified personnel in the respective country. When quality rails are maintained well from the very beginning with the methods we apply, this can make their life-cycle up to twice as longer. The current condition of most rails in Bulgaria is such that it requires either replacement or emergency remedial work. Consequently they will have to be maintained in compliance with contemporary European requirements and technological achievements. Some 12 years ago SPENO sold a machine in Bulgaria but I am not convinced that Bulgarian railways managed to achieve the relevant results with it. This machine is neither used efficiently enough, nor is it maintained in the best possible way. This situation is mainly due to lack of funding. Rolling stock operations along bad quality rails results in serious safety risks and unforeseeable financial losses. As far back as fifty years ago Europe got convinced in the efficiency of rail maintenance and Bulgaria should make use of this experience.



In Brief


“Honorable customer of BDZ” award was handed out

At end-December the “Honorable customer of BDZ” award was handed out for the sixth year running. The winner in the campaign is Tihomir Atanasov from Plovdiv who has collected 32.96 points from buying 9 one-month railway passes for the route Plovdiv – Sofia. He received a railway pass for free travel along the whole railway network in 2011. Awards were given to eight other customers of Holding BDZ EAD. The new bonus point collection programme of BDZ for 2011 started on 10th January.


BDZ reports better financial results in 2010

According to the transport minister Alexander Tsvetkov Holding BDZ EAD improved its financial result in 2010 by BGN 17 mln, i.e. the company reduced its losses. The losses, incurred by SE NRIC, were also cut down. In general, the financial results in the transport sector in 2010 are better than those in 2009 by BGN 25 mln.


The EC permitted the allocation of state aid for BDZ

In December the European Commission gave approval for the state financial aid for the rehabilitation of BDZ, amounting for BGN 249 million. The permission is temporary in order to enable the Commission to pronounce itself on the plan for restructuring of the national railway carrier, which should be presented by our country within six months. The total amount of the state aid is limited to the absolute minimum, necessary to the railway carrier to perform its activity during the first six months of 2011. In response, the Bulgarian authorities undertook the commitment to present within the set deadline a plan for restructuring which will guarantee the viability of transport services of BDZ.


BDZ reports growth of freight services in 2010

According to the Executive Director of Holding BDZ EAD, Pencho Popov, 1.4% more cargo was transported in 2010 in comparison with 2009. The number of transported passengers is between 30 and 31 million and it is expected that the financial results of the company will be improved by BGN 15 million in spite of the reduced (by BGN 11 million) subsidies for passenger services. Pencho Popov underlined the fact that productivity per employee has been improved by about 10-11 % and the produced ton kilometers of work have been increased by 1%. Personnel numbers have been reduced by about 10% and the level of average gross salaries has been retained.


Minister Tsvetkov met minister Romani

On 1st December the minister of transport Alexander Tsvetkov received the Italian minister of economic development Paolo Romani. The two ministers discussed the development of Trans-European corridor No 8, the potential for cooperation in the modernization of Sofia Underground and the tramway system in the capital city as well as the implementation of important infrastructure projects.


Memorandum for cooperation with China in the railway sphere

On 7th December the transport minister Alexander Tsvetkov and the Chinese minister of railways Liu Zhijun signed in Beijing a Memorandum for cooperation in the sphere of railway transport. The document envisages the transit traffic via Bulgaria along the Euro-Asian transport corridors, upgrading of Bulgarian railway infrastructure, development of quick and high-speed railway transport in our country and the exchange of experts. The two sides agreed upon the visit of a group of Chinese experts in Bulgaria with the task to study the options for joint production of wagons and locomotives in Bulgaria in compliance with EU standards and requirements as well as with a view to the future cooperation in the sphere of high-speed railways services. During his visit in China minister Tsvetkov met the Chinese transports minister Li Shenglin as well as his Turkish counterpart Binali Yildirim and visited the wagon works CSR Corporation Ltd.


Over BGN 1.8 mln from passenger services during the holidays

Over BGN 1 800 000 are the revenues of Holding BDZ EAD from passenger services during Christmas and New Year holidays. More than 800 000 passengers were served which is about 200 000 more than in the same period of 2009. Most customers travelled from Sofia to Plovdiv, Pleven, Varna, Burgas, Vidin, Petrich and Ruse.


Validation of TEN-T project for Vidin - Kulata line

On 15th December the Council of Ministers validated the draft Agreement for cooperation in the implementation of activities within the Trans-European transport network (TEN-T): “Studies for the development of Priority railway project No 22, No 2207-EU-22070-S” in compliance with Decision No C (2008) 7574/04.12.2008 of the EC. The project covers the railway axis Athens - Sofia - Budapest - Vienna - Prague - Nurnberg/Dresden and on Bulgarian territory it includes the upgrading of Vidin - Sofia - Kulata railway line. The establishment of the whole axis will improve links between the separate national transport networks on the basis of common standards such as the ERTMS systems, electrification, doubling of railway lines, maximum speed of up to 160 - 200 km/h etc.


Minister Tsvetkov met his Brazilian counterpart

Within the visit of the Bulgarian delegation, headed by PM Boyko Borisov, in Brazil on the occasion of the entry into office of the new president Dilma Rousseff, the transport minister Alexander Tsvetkov met his Brazilian counterpart Paulo Sérgio Passos. The two ministers discussed the opportunities for development of bilateral relation in the sphere of railway transport.


No operational personnel will be made redundant in BDZ

According to the Chairman of the Board of Directors of Holding BDZ EAD, Vladimir Vladimirov, it is not envisaged to make any operational personnel of the railway carrier redundant in 2011. In an interview for Focus radio he stated that the reduction of personnel will take place in a natural way, i.e. through the retirement of employees who have reached retirement age and through restructuring of activities in such a way so as not to appoint external applicants to positions which have been made vacant after company employees have voluntarily relinquished the company.


Minister Tsvetkov met the trade unions

On 13th January the transport minister Alexander Tsvetkov met the leaders of the two major trade unions KNSB and KT Podkrepa. It was agreed to establish a working group which will elaborate a plan for financial stabilization and investment programme of SE NRIC and Holding BDZ EAD.

The parties agreed that no employees of BDZ and operational personnel of NRIC will be made redundant until the working group completes its task. Minister Tsvetkov proposed the identification of a social compensation package for the employees who relinquish the structures of both companies in result of structure optimization. The meeting was attended by the Minister of labour and social policy, Totio Mladenov.


Disinfection stations to be concessioned

In 2011 SE NRIC intends to concession the disinfection stations at the border crossing points, ports and major cities. Nearly eight thousand wagons were handled in these stations in 2010 and revenue from these services amounted to over BGN 140 000. This revenue, though, is insufficient to cover expenses. 


The new train timetable entered into force

The train timetable of Holding BDZ EAD entered into force on 12th December 2010. Passenger services in 2011 will be provided by a total of 619 trains, of which 27 are international trains, 91 are fast trains (among these 19 are fast trains with obligatory seat reservation), 149 are the regional trains and 352 are the suburban trains. The operation route of some trains is longer and there are newly added trains as well (two regional trains between Plovdiv and Pazardzhik, two trains between Sofia and Cherven briag, one train between Shumen and Gorna Oryahovitsa). Due to continuous works along Plovdiv – Svilengrad railway line there are changes in the train traffic scheme. As regards Sofia – Pernik line section, trains continue to operate in regular rhythmic intervals.


SE NRIC expects BGN 90 million from infrastructure charges

According to the financial director of SE NRIC, Joanna Dimitrova, the company expects revenues of BGN 90 million from infrastructure charges in 2011. The annual subsidy for SE NRIC will amount to BGN 127 million and the capital transfer will be BGN 90 million, including the cofounding under Operational Programme “Transport”. The company will utilize the loan of BGN 140 million from the World Bank for the procurement of equipment and facilities to reduce manual labour and optimize its personnel. In 2010 SE NRIC incurred a loss of BGN 16 million which is three times less than in 2009.


Danube Bridge 2 is 60% ready

By end-2010 60 % of the works on the construction of Danube Bridge 2 have been completed. It is considered that the bridge could be ready by end-2011 and thereafter the tracks will be laid and the road section will be covered with asphalt. Works on adjacent infrastructure have been completed by 50%, including the construction of 8 road and railway overpasses.


“Super Burgas” project gets launched in 2011 

According to the Executive Director of “Public Access Zone Burgas” AD, Pavel Marinov, the procedures for selection of contractor for “Super Burgas” project will get started in January 2011. A funding of EUR 26 million under OPT has been provided and should be utilized by 2013. After the completion of the first phase of the project, it will be possible to apply for funding for the whole project, which costs BGN 558 million and includes the construction of a new railway station.